• by Ray Schultz , September 2, 2024

Manoj Bhargava, president of The Arena Group, has asked a federal court to remove his name from a lawsuit filed against The Arena Group by Authentic Brands Group (ABG) over the failed deal to license the Sports Illustrated brand. 

The motion claims that ABG seeks to hold Bhargava “individually liable under an ill-advised and legally deficient veil piercing/alter ego theory of liability.”

In a suit filed in April, ABG alleges that Bhargava “exercised control over Arena by (1) directing the head of Human Resources to terminate certain Arena executives before installing himself as interim CEO; (2) causing Arena to fail to make the $3.75 million quarterly royalty payment due on January 2, 2024, as well as other payments, in furtherance of his efforts to create a pretext for terminating Arena’s unionized employees; and (3) causing Arena to fail to make the $45 million Termination Payment in an attempt to force ABG to renegotiate the Licensing Agreement,” Bhargava concedes. 

However, the motion filed late last week argues that Bhargava was not a party to the 2019 licensing agreement. His firm, Bridge Media Networks, LLC, announced it was acquiring The Arena Group in August 2023, but “that deal is not final,” the motion adds. 

It continues, “it is axiomatic that he cannot be personally liable for the alleged breach of a contract to which he is not a party.”

The motion adds that the court should “reject this flawed veil piercing theory and promptly dismiss Plaintiffs’ claims against Bhargava individually. To do otherwise would drag the relatively straightforward business disputes in this case – such as whether Arena breached the Licensing Agreement by failing to make required payments to ABG – down a rabbit hole and unjustly force Bhargava to live under the specter of individual liability, however frivolous, while this case is litigated.”

The Arena Group has filed a countersuit against ABG. 

The cases are on file with the U.S. District Court for the Southern District of New York.